Long Island City Seen as Best of New York's Four Amazon HQ2 Sites Based on Space

November 7, 2018

Long Island City, part of New York City’s Queens borough, is the city’s most enticing site for online retailer Amazon to build its second headquarters because the area is near air and highway transportation, has millions of square feet of available land and more than 15 percent of its office space is now empty, say brokers, developers and analysts.

The neighborhood offers various options for Amazon’s project, known as HQ2, whether it builds, buys or rents, brokers and developers said. Of four neighborhood sites submitted to Seattle-based Amazon, they explained, Long Island City edges out the other three proposed New York sites, Midtown West, Manhattan’s financial district and downtown Brooklyn, because it’s closer to New York airports and major transportation thoroughfares and has less commercial property density. Even so, New York may have trouble competing with other cities that have lower costs of living and a lower paid, non-union construction labor force.

New York City is one of 20 finalist cities Amazon selected this year for its headquarters project that the company said would add 50,000 jobs and $5 billion in capital development. The Washington Post reports that officials in Crystal City in Arlington, Virginia, are in advanced talks with Amazon, and the Wall Street Journal reports Dallas and Long Island City are also in late-stage talks as Amazon seeks to split its headquarters evenly between two cities.The New York Times reports Long Island City will be one of two sites selected.

Amazon declined to comment on whether the company has looked at development sites on Long Island or whether they would be making an official announcement this month.

CoStar Market Analytics shows why Long Island City could edge out the other three sites in New York City, with that neighborhood having about 660 million square feet of available development land. That would be plenty of room for the online retailer, which had initially sought space for one 500,000-square-foot corporate campus with as much as 8 million square feet of expansion potential. Now, it is reported that the ecommerce retailer may be splitting that requirement among two cities.

“Long Island City still has big tracts of land out there for a large standalone campus,” said Scott Barone, principal at New York based real estate development firm Barone Management. “You can easily find four 1 million-square-foot buildable sites within a three-block radius of one another. My assumption is Amazon is only looking south of the 59th Street Bridge in the Hunters Point area. These are big sites that still could be put together.”

He said another plausible area marked by “huge plots of land” is east of Newtown Creek, which branches off from the East River and flows along the southern side of Long Island City, separating it from northern Brooklyn. Nearby warehouses are operated by direct-to-consumer food grocer Fresh Direct, Barone said.

Land owned by Plaxall along the southern tip of Long Island City is another possibility, according to Barone. Plaxall, a plastics company founded in the 1930s, is run by the Pfhol family, which has spent 70 years assembling 12.4 acres of land along the southern coast of Long Island City known as the Plaxall family site. Last year, the family introduced plans to redevelop the area part of the larger 15-acre Anabelle Basin, to include nearly 5,000 units of housing, 335,000 square feet of light industrial space and 328,000 square feet of retail and commercial space.

Richard Selig, managing principal at the New York City office of real estate brokerage firm Cresa, said, “It is not that hard to increase a footprint in Long Island City, because there is so much land to build on. But it would take a couple of years to get them in and a couple of years to build them out.”

Currently in New York City, the planning approval process can take six to eight months and on-site approval can span three to four months, officials say. At that rate, building a site of the kind Amazon wants could take two years in the best conditions.